Editors’ Blog

Arthur Levitt former head

Arthur Levitt, former head of the SEC, tried but failed to prevent accounting firms from being accountants and consultants for a single firm. That might (stress might) have made a difference with Enron. In any case, after Enron, it now looks like a pretty good idea.

In The Hill, Alexander Bolton nicely untangles the web of money contributions and Washington hardball that led thirteen Senators to bully Levitt into backing off.

Most even threatened to cut his funding if he didn’t relent.

Dick Cheneys continued refusal

Dick Cheney’s continued refusal to hand over the notes, minutes and miscellaneous doo-dads of the White House Energy Task Force (ETF) is very bad news for the White House. All that’s unclear is what kind of bad news it is.

Let’s run through the possibilities.

Possibility #1: There’s really nothing in the ETF notes, the White House has a deep ideological belief in executive branch privilege and thus secrecy (which is clearly true). On principle, on separation of powers grounds, they’re resisting encroachments from the Congress.

End Game: The administration is eventually compelled to turn over the notes, either politically or judicially. Nothing bad is revealed, but the period of resistance fuels and continues the Enron cloud over the White House, perhaps even creating the investigative pressure that unearths other things we don’t know about. It keeps Enron as an issue deeper into election season. The fact that nothing was found in the notes after all doesn’t undo the damage. That’s reported in Section L, page 79 of the The New York Times.

Possibility #2: There’s really nothing in the ETF notes, but the White House has made a strategic decision to resist ceding the investigative initiative to the Congress and realizes that this is where it has to make its stand.

End Game: See end game for #1 (above).

Possibility #3: There’s nothing illegal revealed in the ETF notes, but they describe a hand-in-glove closeness between the administration and energy companies, particularly Enron, that will be deeply embarrassing.

End Game: The administration is eventually compelled to turn over the notes, either politically or judicially. The period of resistance fuels and continues the Enron cloud over the White House, perhaps even creating the investigative pressure that unearths other things we don’t know about. Weeks or months of resistance amplify the damage of the embarrassing revelations.

Possibility #4: It’s really as bad as you can imagine. The notes reveal either illegal acts (which I find hard to believe) or one of the following: a) foreknowledge of Enron’s problems, b) a direct nexus between money contributions and efforts to help Enron, c) various bad stuff that will lead heavyweights to resign.

End Game: The administration is eventually compelled to turn over the notes, either politically or judicially. Various people end up doing time or resigning their appointments. It was a good strategy because they had to keep the information secret if they could. It just didn’t work.

My money is on a possibility #3, with #1 and #2 thrown in for good measure.

My how the mighty

My, how the mighty have fallen.

Regulars readers will remember that the first TPM Enron post way back on TPM World Exclusive!  You heard it hear first!  Must Credit.November 29th took aim at the company’s fabulously arrogant “ask why” corporate ad campaign. That was the ad campaign featuring the ‘metalman’ commercial and the annoying computer-voice ‘why, why, why, why‘ trailer. It even had its own website, askwhy.com.

Well, hopefully you took a look at the links while they were available.

The askwhy.com domain is now, surprise surprise, being put on the auction block by an outfit called domaincollection.com.

Ouch!

I guess there’s some joke in here about living by the frictionless markets, dying by the frictionless markets.

Why, why, why, why

In the wake of

“In the wake of Enron’s collapse, it has become apparent that many financial firms — from Enron’s lenders to Wall Street bankers who underwrote the company’s partnerships to investment houses that bought into them to the accountants who reviewed their books — knew more about Enron’s condition than the company publicly disclosed.”

That’s one of the key grafs in a fascinating article in today’s New York Times which describes how Veba, a German utility company considering a merger with Enron, was able to piece together a picture of the company’s rickety financial footing with only a relatively cursory investigation based on publicly available documents.

“We were wondering why this wasn’t common knowledge, or why it wasn’t discovered by those people whose business it was to discover these things,” one of the analysts told the Times.

It’s starting to seem like Enron’s condition was, if not an open secret, then at least a secret that was hidden in something like plain view. Many apparently knew at least some of the key details. And perhaps knew enough to know not to know more.

Who else knew?

Questions one two three

Questions one, two, three and four are each ‘who leaked the memo revealing that Colin Powell – alone among the president’s top military and judicial advisors – wants the al-Qaida and Taliban prisoners classified as prisoners of war under the Geneva Convention‘.

Who got the leak, Bill Gertz and Rowan Scarborough at the Washington Times, gives a pretty clear idea which side of the debate did the deed. But who precisely? The Pentagon, the Counsel’s Office, Condi’s people at the NSC, or perhaps one of the very key people in the office of Vice President Cheney?

What appears to be

What appears to be unfolding now is not only a political scandal but something on the order of an autopsy of a major corporate exponent of Southwestern wildcatter capitalism and its relationship to political power.

First on Enron’s patronage of pundits and opinion leaders. I don’t agree with Andrew Sullivan often. But I think he’s on to something with Enron and its patronage of pundits and intellectuals. I’ve already said I think he’s been way over the top on Paul Krugman. But on the broader issue of Enron putting a lot of money into the pockets of influential opinion leaders, that’s worth looking into.

Some of the people, Bill Kristol for instance, have been pretty up-front about it. Most have been much more cagey.

The real question in my mind is how widespread this practice is. As you can tell from the Online Contribution link over on the left, TPM doesn’t have this problem of interested corporations trying to stuff $50,000 checks in his pocket. But it’s very hard for me to believe that Enron was the only company doing this. Who else?

Then there’s another issue. We now have two apparent cases of Enron’s insinuating itself into the Bush White House – this may actually be giving the White House far too much of a pass – by putting the White House’s campaign consultants on its payroll.

Yesterday the New York Times reported that Enron put Ralph Reed on the payroll as a favor to Karl Rove, to help keep Reed in the Bush camp. Reed and the White House have both sorta denied the claim. But it’s at least consistent with what I learned about Reed while reporting this article two years ago.

(I’ll say more about Ralph Reed in a future post.)

Now it also emerges that Ed Gillespie went immediately from the Bush campaign and into the hands of Enron as its man to lobby the Bush administration. Reportedly, on the energy task force and stimulus package.

Now, I think I know how this works.

Let’s stipulate first that Enron didn’t seem to have much difficulty getting its calls returned at the Bush White House or getting its views understood. The standard good government criticism of this would be that Gillespie didn’t have a ‘cooling off period’ before lobbying his old friends. That misses the point. This sounds a lot more like Gillespie was continuing to work for the Bush White House. He just got put on Enron’s payroll.

Top Ten new names

Top Ten new names to be field-tested for inevitable Arthur Andersen Accounting corporate rebranding campaign.

10. AAA

9. Andersen Foods

8. Kmart

7. Andersens Anonymous

6. Slam Duncan

5. H & R. Andersen

4. Fuzzy Math

3. Hans Christian Andersen

2. Andersen Confetti

1. Yo Yo Baby Andersen.com!

There are countless things

There are countless things that can be said about the tragic suicide of former Enron executive J. Clifford Baxter. The only appropriate and correct expression, of course, is empathy.

In the context of the broader Enron scandal, Baxter’s suicide pushes the whole affair onto the terrain of bad fiction and the paint-by-numbers made-for-TV mini-series.

It also follows the recent pattern of events in which every day brings news that is not just more ominous and damning than the day before but much more ominous and damning than the day before. Don’t mistake me: I’m not talking about the possible political scandal. I’m talking about the corporate and economic one. And on that count, how can anyone deny that this is now one of the greatest business scandals in American history?

What adds a greater element of mystery to Baxter’s death is that, if you were writing this as a script, he isn’t exactly the one who you’d tap to take such a rash step. Far from being the guilty party at the center of the mess, he seems quite the opposite. While being a high-level Enron executive, who probably knew all the relevant facts, he was apparently one of the in-house Cassandras who knew the place was a house of cards and started ringing the alarm bell, at least on the inside. This provoked his departure last May.

He was one of the people doing the right thing, not the wrong thing. Or at least less of the wrong thing than the rest of the brass.

Baxter’s suicide inevitably fits into this puzzle. But he seems to have taken his life not because he knew more or did more, but – as must have been clear when he left the company last May – because his conscience was more delicate than those of his colleagues.

This is a special

This is a special Talking Points Memo screw-up alert. I got the call letters wrong in my earlier announcement. So let me try this again.

Ahem …

Talking Points will be doing special on-air, pre-State of the Union pointillizing on WMAL in Washington, DC. Specifically, the Victoria Jones Show (TPM’s favorite radio personality!) next Tuesday night between 7 PM and 8 PM.

Look at the following

Look at the following paragraph from Larry Lindsey’s article from last Friday’s Washington Post defending the Bush tax cut against possible repeal. The piece has already been rightly criticized for being wilfully disingenuous in using other peoples’ quotes in a misleading fashion. But look at this graf. Is this paragraph as intentionally misleading as it appears? And what precisely does it mean? We’ll say more on this latter point later.

Very high personal taxes were clearly one factor that helped choke off the expansion. While personal taxes on average took only 12 percent of personal income in 1993, they consumed almost 24 percent of the growth in personal income between 1999 and 2000.

The point isn’t simply that it’s misleading. The actual economic reality the statistics point to seems simply enough to understand once you look closely at the structure of the sentence. The point is that it looks intentionally misleading. And if that is so, where were the Post editors?

Glenn Reynolds writes a

Glenn Reynolds writes a great weblog. But I’m afraid he’s got me a bit a wrong in this critique of yesterday’s post which began … “Smoking gun or steaming pile?”

(Yes, I’m hoping this pithy phrase will get picked up widely.)

Glenn took me to mean that “Bush should be judged by his proximity to Ken Lay et al.”

That’s not what I said. I’m not shoulding here. I’m just telling you how I think this will all develop. And there’s a difference.

Also, Glenn points to this post on another site to make the case that … (drumroll) you guessed it, Clinton is worse.

The post (on another blog) lists Marc Rich, the McDougals, and even people like David Hale, who, if you actually follow these things, you know had little if any actual connection to Clinton — as opposed to fictive connections manufactured later, etc. etc. etc.

In any case, Bill Clinton had face time with some less than savory people. I’m willing to grant this. And I don’t think George W. Bush or any of his cronies are guilty of anything by what amounts to some sort of contagious guiltiness. Ken Lay’s a crook. You knew Ken Lay. So you’re a bit of a crook. Etc.

That said, you simply cannot say that Ken Lay was some dime-a-dozen campaign contributor who got his picture taken with the president at a reception. Or someone he’d had some dealings with at some point in the past. It just doesn’t wash.

Finally, TPM readers in Washington, DC can hear their Talking Points live next Tuesday night before the State of the Union. No, no streaming video or audio on TPM. But I will be doing a little pre-game on WMAL between 7 and 8 PM. I’ll update later with details.

If you feel youre

If you feel you’re in need of reading something truly heartbreaking and bleak, then find out more about these two little guys in the picture opposite. They are Yura and Sergei, two runaways passing their day at a Moscow rail station sniffing glue. To find out more read this article from the English language Moscow Times.

Smoking gun or steaming

Smoking gun or steaming pile?

Some Democrats seem disappointed that no one has yet found the first. But the Enron scandal and its consequences for the Bush presidency seems much more like the second. Sometimes what makes a scandal truly damaging isn’t this or that particular thing you did wrong as being in close proximity to something really nasty and unpleasant. And President Bush and his top brass look like they’re closed off in the Oval Office with … well, something really nasty and unpleasant.

Some Republicans are beginning to realize this.

Give it time. Give it time.

Wow. Great reaction so

Wow. Great reaction so far to our new feature, Ari Fleischer Ridiculous Misstatement Watch (TM). Thankfully, given the subject matter we’re not worried about lacking material for future installments.

Now, a few quick points. TPM may seem omniscient, I grant you. But he can’t be everywhere. He can’t watch Fleischer’s every move. He needs help.

Now there are a lot of DC journos who read TPM, even a few in the White House press corps.

YOU KNOW WHO YOU ARE!

Now, not every foolish lie can be shoe-horned into a story. But don’t let it go to waste. Send it as an anonymous tip to TPM.

More later on what makes a perfect candidate for Ari Fleischer Ridiculous Misstatement Watch (TM).

Two cheers for Tim

Two cheers for Tim Noah. And complete agreement regarding celebrity historian Doris Kearns Goodwin.

As regular readers know, I’m always trying to put my history doctorate to some use on TPM. (Well, okay, in a few months it’ll be a history doctorate. But then historians in the public square seem to play pretty fast and loose these days. So maybe it’s okay to just say it’s a doctorate?)

Anyway, Doris Kearns Goodwin and plagiarism.

As I wrote a few weeks ago, I think mistakes can be made either through innocence or sloppiness or disorganization. I think one can have a sentence or a phrase of someone else’s bubble back into one’s consciousness a few months later and not remember it’s not yours. As I wrote then, I think this should be called misdemeanor plagiarism. Worthy of a good whack on wrist, but not a firing or a career-ending offence.

What drives me &$#%#*$ nuts, though, is when TV historians have the unmitigated gall to say that this is actually okay to do. It’s not. No one has ever said that it is okay to do. Not until Steve Ambrose at least.

As Noah points out (as long as we’re being fastidious with handing out credit, the Kearns story was broken by Bo Crader in the Weekly Standard), Kearns says that you can lift a few sentences or a whole graf as long as you toss the author a bone in the form of a footnote.

It’s not. For better or worse, I was trained as a professional historian. And no one thinks this is true. Footnotes are about ideas and sources, not prose. That’s why we have quotes. What people do sometimes wonder about is if you are very heavily reliant on someone else’s ideas and merely toss them a footnote. At some point that crosses the line too. Not into plagiarism, but at least into scholarly inappropriateness.

No one thinks a footnote covers stealing prose.

There should be a reckoning for this sort of gall and deception.

Even more clues that

Even more clues that Ken Lay was in the running for a variety of cabinet and ambassadorial appointments. (See this earlier post for speculation about why this may matter.) In addition to the possible posts noted on Monday, this article from a year ago in Business Week says Lay was being considered for Treasury.

Wouldn’t that have gone well.

I like Don Rumsfeld

I like Don Rumsfeld too, but … Well, a few folks have fallen for this press release from the Sec Def’s office calling out a bunch of big media outlets for getting it wrong about whether or not he owned Enron stock.

He doesn’t mention Talking Points (sniffle, sniffle), but the list would have included us too since we reported that Rummy owned a bit of the ‘Ron back on January 2nd.

First let’s stipulate that whether Rumsfeld owns a few shares of Enron really doesn’t matter to this whole scandal. But let’s look at the dispute, which doesn’t take much more than some elementary logic to unpack and see that Rumsfeld — or more likely his flack — is full of it.

Rumsfeld’s press release starts off by saying …

Mr. Rumsfeld does not own any shares in Enron.

Contrary to the Associated Press, Washington Times, USA Today and New York Times stories, to the best of his knowledge he has never owned shares in Enron, and definitely has not since he divested most of his holdings on reentering government in January 2001. Prior to joining the government, Mr. Rumsfeld had funds managed by professional money managers, including index funds, so it is conceivable that one of those funds may have owned shares in Enron, but not to his knowledge. At present, he has a blind trust and is not aware of the investments in the trust.

Wow! Sounds pretty good. Rumsfeld didn’t own any Enron stock.

But wait. There’s another paragraph.

Mr. Rumsfeld’s accountant advises that for a period of time, until immediately after Mr. Rumsfeld was sworn in as Secretary of Defense, Mrs. Rumsfeld had an investment with an organization that designed a fund to replicate the S&P 500 index, and that for a period Enron was a component of that fund, along with several hundred other securities. As an investor in that fund, Mrs. Rumsfeld owned 100 shares of Enron stock before Mr. Rumsfeld came into the government.

Okay, so wait.

Apparently Rummy’s accountant chimed in between the writing of the first and second grafs. Disclosure statements sometimes don’t make clear (in fact, theirs did not) whether a husband or a wife owns stock. And the general theory underlying the laws assumes, rightly, that it doesn’t matter whether it’s you or your spouse, etc.

The next paragraph goes on to say that soon after Rummy became Sec Def, he and his wife divested themselves of various holdings including the Enron stock. Then there’s this kicker.

The Associated Press, Washington Times and the New York Times stories all cited the Center for Public Integrity as a source. USA Today cited its own research. All were inaccurate. To the best of our knowledge, none of the news organizations contacted Mr. or Mrs. Rumsfeld to determine the accuracy of their stories.

Actually the news outlets were relying on the facts generated by the Center for Public Integrity and they did try to check, but to no avail, as their response to Rumsfeld makes clear.

TPM on Rumsfeld: love the talk, love the camp, hate the crap (and the flack).

The word has been

The word has been out for a while that Ari Fleischer is one of the more feckless and incapable press secretaries any White House has had in some time. And that’s saying something, because to date Fleischer has really never had a challenging situation to deal with. So, say what you will about Dee Dee Myers’ chaotic tenure as White House Press Secretary in the early Clinton years, but she had a lot on her plate.

Could Enron be the scandal that convinces the adults in the White House that the president needs to hire a pro to do his spinning for him?

Can Ari Fleischer tell

Can Ari Fleischer tell the truth? Let’s make this the first installment of the Ari Fleischer Ridiculous Misstatement Watch.

Here’s an exchange from today from Fleischer’s daily Enron beating …

QUESTION: The question is, does he [President Bush] feel that he [Ken Lay] should have the sort of access that he’s had? Or does he believe that there ought to be more campaign finance reform?

MR. FLEISCHER: The President thinks that access should be across the board. And that’s why the Sierra Club, for example, as you know, met repeatedly with the energy task force.

Wow, Sierra Club met with the Energy Task Force. Who knew?

Actually, The Sierra Club never met with the Energy Task Force while it was task-forcing. It was only after the Task Force had released its report that the Vice President agreed to meet with Sierra Club representatives to hear their gripes. So basically after it was no longer a task force at all.

Is this a lie?

Okay quick TPM quiz.

Okay, quick TPM quiz. Who’s the most execrable Larry King Live guest who’s made three appearances or more since September 11th?

Sarah Ferguson, Duchess of York?

John Walsh of America’s Most Wanted?

Or Chas Grimaldi, the reformed serial-killer who now lectures around the country to audiences of adolescent sociopaths on how to reform their lives before it’s too late?

Okay, I admit it. I made up Chas Grimaldi. But, you know, I couldn’t come up with a third person who was equally loathsome. And someone you’d also expect to see on Larry King Live.

Heres an angle no

Here’s an angle no one seems to have given much attention.

After President Bush’s election, Ken Lay’s name was tossed around as being in the running for a number of potential administration appointments, including Secretary of Energy (Gas Daily, January 5th, 2001) and the Ambassadorships to Great Britain (Times of London, Jan 29th, 2001, February 5th, 2001) and Mexico (Dallas Morning News, March 30, 2001). Obviously, it didn’t happen.

Why? (As the Enron ad campaign might say.)

Perhaps it just didn’t pan out. Maybe Lay decided he didn’t want the job.

But could Lay have been vetted and come up wanting? Could the White House have done a background check and come across some uncomfortable findings? Could Lay have been gracious enough (in that heart-to-heart potential nominees have with high-level officials or presidential confidants) to let on that there might be trouble on the horizon?

Note to White House press corps: this one’s on me.

PS. Special thanks to TPM reader WB for putting me on this trail.

No more on Krugman

No more on Krugman and Enron here in these pages — barring some new facts or interesting tidbits. But allow me to briefly touch on one point. The criticism of choice now seems to be that Krugman’s disclosure of being on an Enron advisory board was not enough, since it didn’t make clear this was a paid position.

But this is foolish.

Who serves on any corporate board without pay? No one. These are paid positions, period. Salary. Consulting fees. ‘Honoraria.’ Whatever! Folks get money.

Do people do enough to earn the money? That’s another matter.

Should the companies’ fiduciaries keep a tighter check on the purse strings? Maybe.

But are they paid? Always.

Is pro-market capitalist TPM the only one who knows this? TPM-sponsored classes in corporate governance and culture?

I hesitate to weigh

I hesitate to weigh in on this. But I must say all this talk about Paul Krugman’s alleged conflict of interest over Enron seems … well, a touch over-wrought?

Is this really a problem? As nearly as I can tell, Krugman got paid $50,000 for serving on some advisory panel for Enron in 1999. For $50,000 he hung out for a couple days at some conference and talked economics. He was supposed to do it twice, but the other conference fell through, or some such thing. (By the way, Krugman has posted his own defense here.)

A few points. One, conflicts of interest usually get attention when it’s dog bites man. That is to say, if Krugman were making excuses for Enron. Since he’s not, what exactly is the problem?

Second, Andrew Sullivan seems to think that the mania for efficiencies which Krugman displayed in this Enron article in Fortune was somehow wildly out of character. The idea being that Krugman is a taxing-loving lefty economist and that this particular, more Smithian article shows he was on the take, etc.

Sullivan just must not follow centrist or liberal economics that closely. Perhaps a wise bit of inattention, but telling nonetheless.

When I worked at the American Prospect, certain economic journalists at the magazine were endlessly griping about Krugman as some sort of right-leaning or establishment economist. Actually, more than one, come to think of it. There was a even an issue cover I think, or at least some page art we had commissioned, showing Krugman as a crude pitchman or something. I always thought this sort of talk was a bit whacked. But well … we don’t have to get into my history there.

In any case, the relevant point is that the seeming oddity or strikingness of Krugman’s views in that article only seems so if you haven’t followed the field. And I think the common assumption would be that Krugman — at least regarding popular economic questions — has shifted a bit left on a broad front in the last couple years, though I’d probably chalk that up to the terrain shifting as much as anything.

If there’s an embarrassment here, it’s that Krugman participated in the common business of taking a pretty large sum of money from corporate bigwigs for a pretty small level of exertion. (Note to corporate bigwigs: this is a common business in which TPM is eager to become involved — though he’ll keep criticizing until the offers start coming in.) But I don’t see the conflict, since he seemed pretty straightforward about disclosing it.

Hear that creaking sound

Hear that creaking sound? That’s the conventional wisdom about the Bush administration being in the clear on Enron starting to shift.

The early questions about whether the Treasury or Commerce Secretaries did anything for Enron when they got desperate calls late last Fall really miss the point. Once it became clear that Enron had been losing money hand over fist and that the company was — as Enron Exec Sherron Watkins had told Ken Lay — “an elaborate accounting hoax,” what exactly was it they could have done?

So long as the President didn’t issue an executive order freezing trading in Enron stock or take some other unimaginable action, there was really nothing that could be done. Enron’s goose was cooked.

The questions about what favors got done are going to be ones that did or didn’t get done earlier.

And as Byron York correctly notes in this article in National Review Online, the White House’s growing unwillingness to answer questions is beginning to worry administration supporters.

For my money, I think the allegations stemming from Ken Lay’s apparent axing of the former head of the Federal Energy Regulatory Commission, Curtis Hebert, are the first ones I’ve heard that really could stick.

Hebert, a Republican, got cross-wise with Ken Lay during the California energy crisis. And Lay made it clear to him that if he didn’t play ball he “could no longer support [Hebert] as chairman.” Hebert didn’t play ball and pretty soon after that he was gone.

Hebert goes to pretty great lengths not to draw a direct connection between Lay and his being pushed aside at FERC. But his argument, frankly, strains credibility.

In any case, decide for yourself. Here’s a transcript from CNN from the 15th …

MARCHINI: What did Ken Lay want from you?

HEBERT: Well, actually Ken Lay wanted me to mandate regional transmission organizations, which I had told him there was no legal basis for under the Federal Power Act, not to mention it was not in the best interest of America. As you remember, at this same time last year, we had high prices in California and in the West. We even had the lights going out from time to time.

MARCHINI: Sure.

HEBERT: It certainly was not the time to do something like that when, quite frankly, you’re worried about Americans having the lights on and having lower prices and reasonable energy.

MARCHINI: You didn’t agree with Mr. Lay. What was the fallout?

HEBERT: Well, I didn’t agree with him. Then he informed me that quite frankly, he and his company, Enron, could no longer support me as chairman. So, you know, have it as you will, that was his wish. But, you know, so many people want to give Ken Lay such great weight. I never gave him the amount of weight I think some people did. He certainly tried to wield a big stick as did a lot of his executives in Washington and in states throughout America.

But Enron, I never really saw as someone who could give me expertise as to where we should be going energy in America. I thought they were always looking after the best interest of Enron and never, quite frankly, the best interest of the electrical industry.

MARCHINI: Do you feel that a lack of Ken Lay’s support cost you your job as the head of the FERC?

HEBERT: I never had any reason to believe that the White House was influenced by Ken Lay. I know he has a lot of friends, certainly, in the administration. Because he is-throughout Texas and has done a lot of work there. But the reason I had left the FERC was because the administration brought in two appointees, quite frankly, that agreed with Mr. Lay on mandating the regional transmission organizes. And they disagreed with me. There was already one member at FERC that agreed with them. So, I no longer had the balance, if you will, of the FERC. What good was it to be chairman?

What good, indeed?

Ready for your TPM

Ready for your TPM intelligence briefing? Excellent.

The news today is that Chinese intelligence found a couple dozen bugs on an American-manufactured airplane which was to serve as Chinese President Jiang Zemin’s equivalent of Air Force One. Given where the plane was manufactured and refitted, the origin of the listening devices – which were apparently highly sophisticated – seemed rather obvious.

Jiang was furious at the findings, according to the Financial Times.

But this story isn’t exactly what it appears.

Look closely at when the bugs were allegedly found: last Fall. So this isn’t really news. The fact that Chinese officials went to the press is news. And the reason is fairly straightforward and self-explanatory. President Bush is making a major trip to China late next month. And much rides on it for both sides — which we’ll be saying more about soon.

This is an effort on the part of the Chinese to throw the US side off-balance in the lead-up to the summit. It’s a Chinese attempt to get the upper hand on the US by making it seem that an apology is required or that Beijing is being generous by not demanding one. It’s standard operating procedure from the PRC.

So are the bugs really American? Who knows? I’d certainly assume so. But this doesn’t have anything to do with spying. It’s pure international politics.

Wait. Was it all

Wait. Was it all just a bad dream? Did that whole Bush administration II thing never really happen? Why else would the Clinton White House website be back up online?

No more ‘blame Clinton for terrorism’ articles with multiple factual errors?

No more Ari Fleischer.

Sigh … Oh, to dream.

In life Enron may

In life, Enron may not have produced much of value. But in death the company is turning out some extremely high quality comedic product. Maybe there’s hope for the company yet.

Today Enron fired accounting firm Andersen. “We’re very troubled about the destruction of the documents, and we’re very concerned about the accounting advice we got,” said Enron lawyer Bob Bennett.

But Bennett’s just a hired gun.

The real choice material is coming from the big man himself, Ken Lay:

While we had been willing to give Andersen the benefit of the doubt until the completion of that investigation, we can’t afford to wait any longer in light of recent events, including the reported destruction of documents by Andersen personnel and the disciplinary actions taken against several of Andersen’s partners working in its Houston office …

In other news, Bill Clinton is now suing former White House secretary Betty Currie for insufficient supervision of Monica Lewinsky.

If you havent seen

If you haven’t seen enough craven smarminess from politicians lately, then by all means take a look at this new Washington Post article by Tom Edsall.

Enron cash has become Washington’s newest hot potato. And politicians who until just recently couldn’t grab enough of the stuff are now trying to ‘divest’ themselves of it as quickly as possible.

You take it. No, you take it. No, YOU take it … and so on.

I guess one can’t give the stuff back since Enron is now in a bankruptcy-induced state of suspended animation. So most of these jokers are finding charities to give the contaminated cash to.

Now, this is a pretty sad situation. So to help out we’re announcing the new Enron Talking Points Memo-Capitalization Fund.

If you’re an elected official who is sitting uncomfortably on some Enron contributions, you can donate the money to the ETPMCF. This will not only get the money out of your hands. It will also help support on-going muckracking into the Enron fiasco and humor at the expense of Enron evildoers, which should in some degree expiate guilt owing to haven taken the money in the first place.

Now, it’s true. The Amazon.com payment system can only accept donations of up to $50. And Enron seemed to like giving checks in substantially higher amounts. But this can be worked around pretty easily by returning repeated times to remit the full amount of the Enron donation. It’s like when you have your contributors’ spouses and kids pony up money to evade the campaign finance laws.

Trust me, it’ll work like a charm.

What a breath of

What a breath of fresh air. For some time now I’ve wondered why the US doesn’t pursue what I call an ‘Arabian fringes’ strategy in the Persian Gulf. And now Senator Carl Levin seems to be arguing for something similar.

Here’s the idea.

By now we all know we’ve got serious problems with Saudi Arabia. The question is, do we have any better options?

And the answer, it seems to me, would seem to be a surprisingly clear ‘yes’.

As you can see on this map, the southern and eastern fringes of the Arabian Peninsula are ringed by a series of emirates and sultanates. Some like Oman are actually rather large, while others like Bahrain are tiny little islands in the Persian Gulf.

With the exception of Yemen, though, the one thing that unites pretty much all of them is that they have more progressive political systems than Saudi Arabia and they’re more friendly to the United States and even, in some cases, Israel. Here’s a good, recent article from Slate about how tight we are with the Sultan of Oman. And here’s a transcript of Larry King spending some quality time with the Crown Prince of Bahrain. And that doesn’t even get you to the United Arab Emirates.

So if the Saudis have such a beef with us, why do we need to be there?

It seems to me that our geostrategic needs can be met elsewhere.

A number of readers

A number of readers have written in to argue that there’s nothing wrong or out of the ordinary with the document shredding Arthur Andersen’s accountants did over at Enron. One even tells me it’s standard operating procedure over at Ernst & Young where his sister works.

Be that as it may, I feel pretty vindicated by today’s announcement that Arthur Andersen has summarily fired David B. Duncan, the lead partner on the Enron account.

Another reader points out yet another interesting fact. It turns out that David B. Duncan and Kenneth L. Lay are both on the board of directors of the American Council for Capital Formation.

Now it’s important to note, the ACCF is neither part of nor connected with the United States Institute for Economic Efficiencies, the Academy of Trickle-Down Sciences, the Center for Deregulation and Frictionless Markets, or the Club for Growth. (Actually, here’s where the joke breaks down, because there really is a Club for Growth – it’s a supply-side pressure group that gangs up on normal Republicans in the Northeast … )

In all seriousness, I’m really all for markets, capitalism, and capital formation. (In a round about way it’s one of the reasons I’m now freelancing rather than at my old job.) And to prove it, I’ll even make a direct pitch to support Talking Points Memo with an easy online donation!!!

And if that’s not enough, to fill the void left in the frictionless commodity market world by the Enron collapse, tomorrow we’ll debuting our new online market in Ken Lay and David Duncan prison term years.

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